This week, I had the privilege of attending the "Atlantic Convergence," an event that showcased just how little we truly understand about Portugal’s immense potential in a rapidly digitalizing world. At the invitation of one of the event's organizers, DE-CIX CEO Ivo Ivanov, I spent two days surrounded by visionary leaders of the digital connectivity industry. The event focused on the future of artificial intelligence (AI), the need for stronger global connections, and the increasing demand for data storage infrastructure, such as StartCampus's massive data center in Sines. As I learned, Portugal, particularly Sines, is positioned to become a key player in the digital age, with over 25% of the world’s undersea cables anchored to and integrated into our fiber optic infrastructure. And as I discovered, this is just the beginning.

One of the highlights was hearing Philippe Dumont, CEO of EllaLink, explain how his company is pioneering Portugal’s role in global connectivity. The EllaLink submarine fiber optic cable has reduced latency between Europe and Latin America by 50%, significantly boosting communication speeds. This achievement has strengthened digital sovereignty while fostering scientific and business collaboration. It has also positioned Portugal as a strategic global hub, attracting investment and driving technological innovation in both Europe and Brazil.

At the event, Atlas Edge’s growing presence in Portugal was another topic of great interest. CEO Tesh Durvasula emphasized the company’s expansion strategy, focusing on Portugal as a central point for delivering digital services closer to communities. By bringing edge computing infrastructure closer to the end users, Atlas Edge improves network performance and reduces latency, enhancing real-time services like streaming, cloud computing, and AI. Portugal’s strategic location makes it a critical link in this digital network, and Atlas Edge is leveraging submarine cables and local data centers to expand its capacity and support Portugal’s digital transformation.

I also found it fascinating that Nokia, once known primarily for its mobile phones, is now leading the development of cutting-edge networks for the AI era. Their contribution to NOS’s recognition as "Europe's Fastest Mobile Network," awarded by Ookla, showcases Portugal’s ability to compete on a global scale, paving the way for further advancements in digital infrastructure.

One key takeaway from the event was the ongoing demand for increased connectivity and data centers. With the growing role of data in every aspect of business and personal life, these data centers are not only expanding in major cities but also moving closer to communities and companies, ensuring faster, more efficient services. The undersea cables connecting Portugal to the world play a pivotal role in this growth, transforming the country into a hub for global telecommunications and data infrastructure.

Currently, Portugal hosts approximately 20 undersea cables that link Europe with Latin America, Africa, and North America. This extensive digital infrastructure makes Portugal a critical entry point for global businesses, driving investment in data centers and digital services. Global companies are increasingly seeing Portugal as an ideal location for setting up data centers, which support cloud services, AI development, and streaming platforms. This expansion is creating high-skilled jobs and accelerating the growth of Portugal’s tech sector. The economic impact is substantial; the data center and digital connectivity sector alone could contribute more than €1 billion to Portugal’s GDP over the next decade in direct and indirect revenue.

Another fascinating insight from the "Atlantic Convergence" was how Portugal is fast becoming an exporter of digital services, with undersea cables playing a critical role in this growth. The demand for cloud computing, AI, and streaming services is driving a 10% annual growth in digital service exports. By 2025, digital economy activities, enabled by submarine cables, are expected to account for 7% of Portugal's GDP, further cementing the country’s role as a digital powerhouse.

Portugal’s strategic geographical location was also a recurring theme throughout the event. Much like the explorers of the Age of Discovery, who connected continents through trade and exploration, Portugal today is connecting the world through data and digital infrastructure. Its position makes it a natural gateway for intercontinental data traffic, linking Europe with Africa, North America, and Latin America.

The event also shed light on the growing importance of renewable energy in supporting this digital revolution. Portugal and Spain are at the forefront of green energy solutions, which are critical for powering the data centers that will fuel the digital economy. A key example is the StartCampus data center in Sines, which is set to become the largest renewable energy-powered data center in Europe. This project exemplifies Portugal's leadership not only in digital connectivity but also in the sustainable transformation of the industry.

Portugal is well-positioned to lead the global digital revolution, serving as a complementary interconnection hub for international data flows. By early 2024, Portugal had 33 data centers, including one of the largest in the world located in Covilhã. Additionally, Portugal is home to a unique, 100% renewable energy-powered data center in Sines. The country’s vast network of submarine cables is expected to expand from around 20 today to 116 by 2026, connecting 60 countries across five continents. This extensive infrastructure, combined with strong land connections to the rest of Europe, makes Portugal a critical global hub for data traffic.

These submarine cables offer more than just connectivity—they bring immense economic value as well. By improving latency for key markets like Brazil and the U.S., they increase the efficiency of digital services, boosting Portugal’s competitiveness in sectors like finance, technology, and telecommunications. Companies such as Google, Microsoft, and Amazon are investing heavily in Portugal, further highlighting the country’s rising importance in the global digital landscape.

Looking ahead, the planned expansion of submarine cables by 2026 will have a significant economic impact. Portugal’s digital infrastructure is expected to attract between €1.5 and €2 billion in direct investments. Data center revenues could rise to €1 billion annually, driven by enhanced connectivity and services offered to international companies. Digital exports are projected to grow between 8% and 12% annually, potentially adding €3 to €4 billion to Portugal’s GDP. By 2026, the digital connectivity sector could represent up to 6% of Portugal’s GDP, contributing as much as €12 billion annually to the national economy.

In summary, the "Atlantic Convergence" opened my eyes to the transformative potential of Portugal's digital future. The expansion of submarine cables and digital infrastructure will significantly boost Portugal’s economy, potentially adding up to €12 billion annually to its GDP by 2026. This growth will solidify Portugal’s position as a global hub for digital connectivity and innovation, with direct impacts on job creation, foreign investments, and digital services exports. From what I witnessed, Portugal is not only ready to embrace this future—it’s already shaping it.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes